Accrued Liquidation Costs

12 Months Ended

Jun. 30, 2025

Accrued Liquidation Costs [Abstract]

Accrued Liquidation Costs

5)   Accrued Liquidation Costs

The following is a summary of the items included in accrued liquidation costs as of June 30, 2025 and 2024 ($ in thousands):

		June 30, 2025		June 30, 2024
Development costs	$	11,572	$	8,888
General and administrative costs:
Legal and other professional fees		8,128		7,453
Directors and officers insurance		3,115		3,132
Payroll and payroll-related		2,299		2,273
Board fees and expenses		500		525
Other		529		433
Total general and administrative costs		14,571		13,816
Total accrued liquidation costs	$	26,143	$	22,704

During the year ended June 30, 2025, the Company accrued development costs of approximately $5.8 million related to the construction defect claim asserted against one of the Wind-Down Subsidiaries. At June 30, 2025, the Company’s accrued development costs consist of costs incurred but not yet paid, and costs to be incurred, in connection with the construction defect claim asserted against the Development Entity. These costs include the estimated costs for the initial repair phase of the subject property, as well as estimated costs for the evaluation and engineering and preliminary estimated costs of subsequent phases of repair based on an initial scope of work. Accrued development costs also include estimated legal and professional fees for coordinating the pursuit of litigation related to the construction defect and related insurance claims based on information available to date.

Additional repairs beyond the initial phase will be necessary. The scope of work for the subsequent repairs, timing and cost are based on preliminary estimates. The costs for the subsequent phases of repair, as well as related legal and professional fees, will be reviewed quarterly, and the Company will record any significant changes. A portion of the accrued development costs relate to estimated reserves for contingent liabilities, including other potential construction defect claims, and the administration of such claims after the Company’s liquidation activities are completed. See Note 13 for additional information.

The Company is currently unable to estimate whether all or a portion of the total costs will ultimately be borne by third parties (including the Company’s insurers). Any future insurance recoveries will be recorded when they are deemed probable and estimable. Insurance reimbursements received to date are included in cash, cash equivalents and short-term investments and have not been netted against accrued development costs in the Company's consolidated financial statements.

The Company has concluded that its liquidation activities will not be completed by March 31, 2026 due to the pending construction defect claim against the Development Entity and related litigation. This litigation includes the Development Entity’s claims against its primary and excess insurers, and the prior owner, contractors, and other professionals involved in the development of the site and the construction of the home. The Company currently projects a revised estimated completion date for the Company’s liquidation activities of approximately February 15, 2027.

The change of the estimated completion date of the Company’s liquidation activities resulted in additional accrued liquidation costs of approximately $5.5 million. The additional costs are primarily legal and other professional fees and payroll and payroll-related costs.

The Company is required to file a motion with the Bankruptcy Court to extend the termination date of the Trust beyond March 31, 2026 by September 30, 2025. The Company expects that the motion will be timely filed and that the Bankruptcy Court will grant the motion, as the extension is needed to resolve the construction defect claim and the related litigation. See Note 14 for additional information. If the Trust is extended beyond February 15, 2027, the Company will incur costs in addition to those that have been accrued to date.